Worldwide: WeWork has decided not to make interest payments totalling around $95 million, and has announced the closure of one of its major London properties.
The missed interest payments have led to further speculation about a possible bankruptcy filing. WeWork says it has the cash on hand, and the company has a 30-day grace period to make the payments. At the end of June, it had $205 million in cash and access to a credit line worth $475 million.
“I believe they will absolutely understand our decision to enter into the grace period,” said WeWork’s interim chief executive, David Tolley, said in an interview. He called the move “typical” as a “precursor to a conversation.”
In the UK, the company has given tenants 30 days’ notice to vacate its offices at 133 Houndsditch in the City of London.
The company said: “As part of WeWork’s efforts to achieve a sustainable capital structure and profitable business to serve our members for the long term, we made the decision to stop operating our location at 133 Houndsditch.” It added that it would help customers move to its nearby locations.
Last month, WeWork announced it was undergoing the renogotiation of its lease terms with landlords.
Zoe Ellis-Moore, CEO of workspace consultancy Spaces to Places, told ULN: “WeWork’s challenges persist. There’s a common misconception that the decline of WeWork signifies the downfall of the flexible workspace industry. On the contrary, it’s more accurate to say that WeWork is grappling with an outdated model that no longer proves effective.”
